Is Gold In A Bubble?

Tyler Durden's picture

With precious metals once again on the rise, the questions begin as to whether or not gold is in a bubble. While these questions never seem to occur among the cogniscenti when equity prices race ahead non-stop for months on end with no volatility, Brent Johnson (of Santiago Capital) offers up five 'facts' that help to explain why gold at $1800 is far from a bubble - especially as central banks shift from 'measured' responses to open-ended debauchment.


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Joebloinvestor's picture

Gold will be the last bubble.

Temporis's picture

Silver is my drug of choice.

redpill's picture

If gold was a bubble, there wouldn't be "we buy gold" advertisements everywhere.

MillionDollarBonus_'s picture

"Is Gold in a Bubble?"

Unequivocally, YES. If you are tempted to buy gold at these prices, you absolutely have to stop and think. Ask yourself: what is gold useful for? Is a piece of shiny metal really worth this much money? How can gold just keep going up and up? If it’s too good to be true, it probably is. BE RATIONAL; DON’T GET CAUGHT UP IN THE MANIA. 

LULZBank's picture

Yes, my Gold is in a Bubble wrap.

DoChenRollingBearing's picture

Gold is not in a bubble.

Gold is the single best wealth preserver in town.


Bearings of good value are pretty close...

Baron Robber's picture

pretty sure LULZ just meant he bubble wrapped his gold

malikai's picture

Actually, gold most definitely is in a bubble.

Gold is in the middle of the biggest bubble on earth - the bond bubble.

THX 1178's picture

Which is itself a bubble composing an even larger bubble: the Dollar bubble. A bubble inside a bubble. BUBBLECEPTION.

Dr Benway's picture

No gold is not in a bubble. But when the crash comes, it is likely that gold will temporarily dip, so keeping some of your wealth in fiat for that last stocking up may be advisable.

MeelionDollerBogus's picture

Actually what Kyle Bass said is that a gold standard is a bad idea if you think about "it rationally". But that's completely irrational. Rationally a gold standard is ideal because it doesn't grow too fast but it does grow, it does maintain purchasing power vs goods of importance like food & energy and land, and it does remain money even if central banks go bonkers or new plastic bills melt in the sun or old paper bills get thrown in the washing machine, shredder or burned in a fire.

jekyll island's picture

Good luck finding any takers of your fiat for gold transaction when the crash comes.  

OutLookingIn's picture


Bad currency drives good money into hiding.

Sell your gold when this happens;

The global stock markets become honest, trustworthy, palces of true business.

The big banks are broken up into small ones.

The global financial sector once more serves the economy, instead of the other way around.

Governments drastically downsize and start realistically representing the poeples wishes.

There comes into being a solid, trustful global exchange vehicle for all business.

Large multi-national corporations are broken up into small independent entities.

Miletarists and warmongers are laid hands upon and rendered useless.



Thomas's picture

Central bankers are in a bubble.

RiverRoad's picture

Like Dr. Benway said, when the crash comes gold will temporarily dip too (look back at the charts  end of '08), that's when you make your switch from fiat to gold.

MeelionDollerBogus's picture

The 2008 pattern will not repeat like that. The 2006 pattern is repeating now in a proportional manner.

2011 dec 27 gold 01 | goldpricemodel | 277 week ROC visual confirmation

be wary. Rolling forward this trend looks like this: 2012 09 18 277week roc 01 | goldpricemodel

and SPY isn't so hot 2012 09 13 spy crash soon | goldpricemodel

Richard Head's picture

Your worst troll effort to date.

Alea Iactaest's picture

It's all about timing. Being right but being early (or late) is still wrong. In that context, the plan to pop the bubble has been set: NASA to mine asteroids. Of course no one will be able to audit the payloads but gold will be found and immediately warehoused at Ft. Knox (unless it really works and then JPM and HBC will take delivery).

ATM's picture

"Is Gold in a Bubble?"

Unequivocally, NO. If you aren't tempted to sell your chits of paper for something tangible you must be thinking that the chits will always be worth something. What are chits of paper really useful for? Is a dull piece of paper/linen really worth anything? How can a chit of paper just keep going up and up? If it's too good to be true, it probably is. BE RATIONAL; DON'T GET CAUGHT UP IN THE MANIA. OWN SOMETHING REAL RATHER THAT A CONFIDENCE SCHEME.

Sheeple Shepard's picture

LOL!, I fucking hate chit's of paper. When a taxi driver tells you to buy gold, sell gold.



MeelionDollerBogus's picture

Thanks to the internet I don't think it will work that way this time. When the taxi driver says to buy gold & silver, and the shoe shine boy is buying silver, this time it will because everyone is being told by US to dump dollars because they aren't a viable currency. NOT because you will profit massively by selling gold and silver "at the right time".

I have now run into SEVERAL people who are total strangers admitting they buy gold and silver. NOT for re-sale. For barter & retirement. Now that's NOT a mania. Having anyone try to save anything for retirement or for prepping is a very sliver of a minority in the population even when IGNORING precious metals.

Temporis's picture


Uncle Ben left a little of his white stuff on your chin... You might want to wipe that off.

oddjob's picture

There is no mania, just people choosing to save and store the benefits of their hard work in sound money. That must be some frightening shit for banksters and paperbugz.

Mad Mohel's picture

This guy's bullshit is quickly losing it's comedic value. His trolling seems to be the bubble and it seems to have peaked.

NotApplicable's picture

It's the same problem that's affected Saturday Night Live for so long, single dimension characters go stale quickly.

One can only tell the same joke so many times.

LMAOLORI's picture



Saturday Night Live ceased being funny when it became politically one sided years ago does anyone except die hard leftist's really even watch that show anymore?


NidStyles's picture

Who the fuck cares if they watch it?

edifice's picture

OK, Warren... We've just entered the mania phase of the bull market. Still has a loooong way to go...

Sneeze's picture

Oh MDB....

"Is the US Dollar in a bubble?"

Unequivocally, YES.  If you are tempted to buy US dollars at these prices, you absolutely have to stop and think.  Ask yourself: what is rectangular pieces of green paper useful for? Is a peice of processed pulp really worth this much labor?  How can the US Dollar just keep staying at this value when they are printing so much of it? If it's too good to be true, it probably is.  BE RATIONAL; DON'T GET CAUGHT UP IN THE MANIA

Fixed it for you

Sheeple Shepard's picture

Did you watch the video?

"BE RATIONAL; DONT GET CAUGHT UP IN THE MANIA" Tremendous, talk about a useful idiot.

GoldenDragon's picture

The question you should ask yourself:  what is paper currency useful for?  Is a piece of paper with green ink on it really worth anything?

Alea Iactaest's picture

Its backed by the full faith and credit of the USG.

Darth Rayne's picture

No, it is on a mission. A forty five year mission. 38 years to go. It is to double in value every three years. To grow by 1.913% each month.


It's mission objective is to free mankind from slavery.


Slavery is barbaric. Please help gold whenever you can.


Free gold, free yourselves!


(I have definitely said too much this time!)

FlyingPurpleSheepleEater's picture

I have to stop and ask myself, is this little piece of paper with green ink on it worth $100 when they are printing them faster than I can wipe my ass with them?

Fedophile's picture

"Is the Treasury in a Bubble?"

Unequivocally, YES. If you are tempted to buy treasuries at these prices, you absolutely have to stop and think. Ask yourself, what is a treasury useful for? Is a piece of toilet paper really worth anything? How can treasuries just keep going up and up? If it’s too good to be true, it probably is.



sgorem's picture

All joking aside millionDollarBonehead, I just want to know how in the FUCK did you get 10 GREEN weenies? You must have 10 relatives that have online access, God forbid. I think your mother is calling.........

MeelionDollerBogus's picture

gold is an alpha particle deflector - radiation shielding - and as it happens many of us indirectly rely on satellite communications that depend on this shielding. Some are direct but many of us merely benefit from the financial go-ahead of the companies & militaries that use such communications, not also accounting for "benefit" of entertainment/fraud/propaganda fed by satellite consumer TV.

Rationally gold can stop going up when paper curency is NOT issued at these rates (or higher) and stops entirely, and when real interest rates are over 10%. So long as treasury yields are near 0 nominal and are negative vs real inflation for food prices, gold must go up and will go up, no less than 2500/oz. That's rational. Not mania. Mania is the 100% coverage of gold vs currency or gold vs debt. That's 12,000/oz territory & not sustainable without even more collapse stages carved in stone.

Gold is also useful for dentistry and electronic circuits.

LoneStarHog's picture

No...Gold will not enter a bubble will seek its true value and remain there.

PaperBear's picture

Alternatively, paper will reach it's true value which zero and stay there.

Dr. Richard Head's picture

I don't know about a bubble, but the S&P is slowly making  fibonacci retracement from September 25, 2012. That is another "golden" ratio to finger out.

Drachma's picture

Let one be a number, yet another unity

And the one be to the other as their union be to the one simultaneously

Still equal to this union you will find

A magic square of the most irrational kind

Whose inverted side is but the one diminished by the other

What is that one sacred number my learned brother?

gojam's picture

LoneStarHog, Gold potentially could enter a bubble phase, especially if people begin to panic.

I don't normally minus anyone's comment but yours is so dangerous that I felt I had to. Gold is no where near a bubble now but if panic sets in it could do.

LoneStarHog's picture

There is a difference between a bubble and a spike, the latter being nowhere near the highs of an irrational bubble.  So, you have to ask yourself:  If there is a gold spike due to panic, WHAT would get in payment for your gold? Will someone be crazy enough to offer you another hard asset, like land? "Dangerous"? Think about it.

Alpo for Granny's picture

If it is a bubble there are lots of fish at the bottom of lakes enjoying a bubble bath.

flyingpigg's picture

Right, nothing wrong with bubbles. Another glass of champagne please!

killallthefiat's picture

Spoken like Soros, and I totally agree.  I guess before it pops, we all have to diversify into the non bubblicious item of 50% ammo/50% canned goods.  Not yet though.

fireangelmaverick's picture

Yes!!!!!!!!!!! Now watch the negative ratings pile up.